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How non-resident Pakistani files Income Tax Return in Pakistan

If you are here to read this article, then there are two certain things, one is that you are Pakistani and second, you are living abroad.

If you are searching for a solution for how to file income tax returns in Pakistan then you should stop here as I am going to answer each and every question that might pop up in your mind and you would want to know.

So here are some common questions and their quick answers.

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Summary on Finance Acts, 2018

This document contains amendments made in relevant laws through Finance Bill 2018 (i.e. Tax year starting from 1 July 2018 to 30 June 2019) in Income Tax, Sales Tax,  FED and Customs law.

We at Sharjeel Ayub & Co (Sayub) made an effort to present above mentioned amendments in simplest possible form so that readers get an understanding for proper tax planning.

The document can be used as handy tax rates guide that are applicable for the Tax year 2019.

Sayub comments contained in the documents represent our views / interpretations of the amendments therefore should not be taken conclusive on legal ground without our prior advice.

We sincerely believe that this document is simple and as precise as possible nevertheless, you may ask for further details by contacting us.

To Download Click Here

 

Please explore our website www.sayub.com for interactive guidance on Tax matters.

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Income tax return for tax year 2018; late filers would be treated as non-filers for the whole year

Income tax return filing for tax year just ended i.e. 30 June 2018 has greater significance as compared to previous years. In addition to penalties imposed by FBR for late filing of return, a person filing his /her return for tax year 2018 would not be included in ACTIVE FILERS’ list as published by FBR.

Late filing of returns would not get your name on ACTIVE FILERS’ LIST –FBR hence late filer would be treated as non-filers for the whole year

According to latest Finance Act, 2018 (Budget 2018), newly inserted section 182A of the Income Tax Ordinance, 2001 has made it mandatory for every person filing return of income to file his/her return on or before due date. [Read our blog for details about section 182A of the Income Tax Ordinance, 2001].

Due dates for Return filing

Returns are due according to incomes of person as follows

  Last Date of Return
1.      Persons earning Salary income 31st August 2018
2.      Individual earning Incomes under Final Tax Regime (FTR) i.e. Dividends, Profit from Banks / SSC / DSC etc. 31st August 2018
3.      Other Individuals 30th September 2018
4.      Partnership firms / Joint Ventures etc. (AoP) 30th September 2018
5.      Companies having year end between 1 January 2018 to 30 June 2018 31st  December 2018
6.      Companies having year end between 1st July 2018 to 31st December 2018 30th September 2018 or

30th September 2019 whichever is applicable

 

Types of Return of Income

 

For the tax year 2018, FBR has introduced various types of returns which are just extensions of earlier versions.  Following additional types of returns are introduced in FBR system.

 

Type Person required to file this type of return
1.      114(1) Return of Income filed voluntarily for complete year 1.      Persons earning Business Income

2.      Person earning salary income as well as other than salary incomes but Salary income is less than 50% of total income

3.      AoP

4.      Companies

2.      114(1) Return of Income for a person deriving income only from Salary and other sources where salary is more than 50% of income. 1.      Person earning only Salary income

 

2.     Person earning Salary as well as Other than Salary income and Salary Income is more than 50% of the total income.

3.      114(1) Return of Income filed voluntarily by non- residents Pakistan-Origin person having no Pakistan Source Income For Non-resident Pakistanis having no Pakistan Source Income but need to be on filers list.
4.      116A (1) Returns of Foreign Income and Asset Statement filed voluntarily 1.      Resident persons having Foreign income equal to in excess of US $ 10,000

 

2.      Resident person having foreign assets with a value of US $ 100,000/= or more

 

 

It is direly important to file correct type of return as there is an objective of having various types of returns. FBR has consciously made the above types.

Required Documents / Information for Return filing Tax year 2018

 

For ease of readers we have compiled a list of documents /information that is commonly required for filing Income Tax Return. We have classified in following two categories, please download the file by clicking on the link.

 

  1. Information / Documents for Salaried Individuals        Click Here
  2. Information / Documents for Business Individuals       Click Here
  3. Audited Financial Statements of Company is required to file return for Company.

Feel free to contact us leave comment in comments section.

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tax time

Government is going to punish Non-filers much harder this Time

Budget 2018 (Finance Act, 2018 Approved) had some good news as well not so good news sandwiched secretly for example lowest income tax rates in the history announced and implemented for Individual taxpayers(Salaried as well as Business Individuals), removal of law for automatic selection for tax audit if return is late filed.

However some really harsh steps were taken one of which is ‘If a person failed to file his/her Income Tax return within due dates then he will remain non-filer for the whole year even if he file it one day after the due date’              

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Non-resident Pakistani to File Return of Income or Not

All Non-resident Pakistanis out there must have encountered one question in their mind, that why we should file our income tax return in Pakistan as we are not there in Pakistan so it should not be obligatory on us to file return.

Despite of above, some if not all of us faced a situation where your banker deducts withholding tax all the transactions for withdrawal whether it’s in cash or through cheques.

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What is provident fund?

Provident funds are funds created by employers for the benefit of employees. Legally these are separate from employers and are managed by Trustees of the funds. Trustees are persons nominated at the time fund is established or at the annual general meeting of the fund.

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